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Making Offer At 2006 Level?

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Hello,

Is it correct that prices now are at 2006 level?

I am thinking of making an offer for house with asking price £154K

History:

sold October 2002 for £114K

sold March 2006 for £136K

Shall I offer £136K then?

Thanks!

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The owners have probably paid off around £6k of the money they borrowed to purchase in 2006 providing they took out a mortgage and will want their money back, so I would assume they require around £134k to cover everything including sales fees.

How much are you willing to pay for it?

If you offer £136k, then you have nowhere to go only higher or withdraw.

Many will tell you to offer 20% below £154k which is roughly £123k

Judging by the figures you have put above I might suggest going in at £130k and see what response. If you feel cheeky or prepared to negotiate hard then go in below £130k.

Either way you need to stay strong if you really want to purchase this property and don't be pushed in to offering too much.

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From the numbers you give it appears to be overpriced.

2006 was very close to peak and depending on area prices are down by around 15% since then. If you go to www.landregistry.gov.uk and click house prices then search the index and type in the post code. This will give you chart of how prices in the area have fallen since 2006. (if you post the first part of the postcode I'm sure someone will do this for you and post it if you can't find it yourself)

Ultimately it's what you are willing to pay for it. But be warned prices are falling and are not going back up anytime soon so by overpaying now you could be setting yourself up for all sorts of trouble when you come to sell.

Good luck.

Edited by Pent Up

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From the numbers you give it appears to be overpriced.

2006 was very close to peak and depending on area prices are down by around 15% since then.

Where I am looking, peak was Jan 08 and current prices are at June 06 level (and certainly not 15% below that level)

tim

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Where I am looking, peak was Jan 08 and current prices are at June 06 level (and certainly not 15% below that level)

tim

I did say depending on area.

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Thanks, guys for your thoughtful responses!

I checked Land Registry for BA3 (North Somerset):

Average Price

March 2006 --> 168,191

January 2011 --> 168,555

Looks like in my area prices now are exactly at 2006 level!

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I did say depending on area.

I know. But there is an awful bias here for people to quote the statistics for the areas with the larger falls, even when they themselves live in one of the other areas.

IME the areas which have recovered in the past two years are the ones where the majority of the population live. So it seem reasonable to assume that a random poster lives in that area (and give figures for that area) rather than a still depressed area (giving the figures for that area).

tim

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Average Price in my area:

Jan '11 = 108,475

Jan '05 = 106,063

Looks like Northern Prices are leading the way!! :)

What advice would you guys give for making offers in my area? Offer at 2005 levels?

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No harm in offering lower than 2005 levels. Try 10 - 15% below 2005 price and go from there.

2005 prices may be about the current market price.

If you believe they will fall further, then you need to offer lower. All depends on how long you plan to own the house.

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Cheers S.P.A.

My intention is to buy a property that I will be happy to stay in long-term.

My feeling is that property will continue to fall at least until the end of the year so, I would like to get the 'right property at the right price'. I just think a lot of people need to wake up and smell the coffee with their prices.

I certainly have sympathy for the more likeable, honest property agents such as yourself in such a tough market. I suspect sellers aren't helping in their expectations?

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